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In National Underwriter's 2013 Multicultural Markets Research Study, product affordability was cited as the No. 1 challenge for advisors serving the African American (70 percent) and Hispanic (47 percent) markets. (Figure 7) While on the surface, product affordability may appear to be the root cause for the lack of insurance sales in these markets, is it the real reason the markets are underserved or are their other, underlying factors to uncover?

In the study, only 28 percent of agents cited “more affordable products” as something insurance companies could offer to help them more effectively reach multicultural clients. Targeted advertising (57 percent), better brand awareness (50 percent), easier to explain products (43 percent), more training (33 percent) and live telephone support (32 percent) all scored higher than more affordable products. (Figure 8, next page)

These numbers show that agents place their concerns more with marketing materials and back-office support than they do product affordability. In fact, when asked to elaborate on what insurers could do to help agents better reach multicultural clients, none of the respondents mentioned product affordability as their primary concern.

There is further evidence that the issue of product affordability has been overstated within the industry. When asked about the disadvantages of selling to multicultural clients? Only 17 percent cited “lower earning potential” as a disadvantage of selling to multicultural clients. Difficulty in acquiring clients (65 percent) was the overwhelming answer for this question and once again puts the impetus on advisor success in lead generation. Without the leads, the rest of the responses become a moot point.

Other issues that outstrip “lower earning potential” include: a longer sales cycle (28 percent) and fewer prospective clients (28 percent). The prospective client answer is a significant one as it points to the misconception that there are fewer clients, when, as pointed out earlier in this study, the multicultural population is growing at a significant rate.

Based on these findings, while product affordability is an issue, and one that could use some tweaking, agents have bigger issues facing them when marketing and selling to multicultural markets, first and foremost, the idea of generating leads in new, undiscovered markets.